The amendment that came in from the Cold War

May 19, 2011

Eugene Ivanov

Source: Reuters/Vostock photo

Jackson-Vanik remains on the books, but a new lawsuit argues that it does not apply to Russia at all.

U.S. President
Barack Obama can feel pretty good these days: Osama bin Laden is dead; growing
public opposition to GOP fiscal policies strengthens the president’s hand in dealing
with congressional Republicans; the worst expectations for the natural
disasters caused by the Mississippi River flooding have so far not materialized. His re-election prospects look shinier
with every passing day.

But let’s
not assume that the president sleeps on a bed of roses. Obama has problems of his own, and one
of them is that he’s facing a lawsuit.
The lawsuit was filed on Apr. 18 in the U.S. District Court for the
District of Columbia by two Americans: Edward Lozansky, a former Soviet
dissident and currently president of American University in Moscow, and Anthony
Salvia, a renowned expert on U.S.-Russia relations and formerly head of the
Moscow bureau of Radio Liberty. Lozansky and Salvia are asking the court to
force President Obama to use his executive power to graduate Russia from a
provision of Title IV of the Trade Act of 1974, commonly known as the Jackson-Vanik
amendment.

The
notorious Jackson-Vanik amendment (named after its sponsors, Sen. Henry Jackson
(D-WA) and Congressman Charles Vanik (D-OH)) is one of the most recognizable
ghosts of the Cold War. The Cold
War is long over, but the amendment keeps haunting the house of U.S.-Russia
relations. It was adopted by the
U.S. Congress in 1974 to deny the Soviet Union, a non-market economy at the
time, normal trade relations with the United States as a punishment for restricting
Jewish emigration from the Soviet Union. In 1994 – three years after the disintegration
of the Soviet Union – then-President Bill Clinton announced that as far as the
emigration was concerned, Russia was no more in violation with U.S. trade law. Ever since, Russia has been granted
normal trade relations through annual presidential waivers. In 2002, the U.S. Department of
Commerce officially recognized Russia as a market economy. Both pillars of
Jackson-Vanik have collapsed.

Case
closed? Not so fast. The U.S. Congress rejected requests
from both President Clinton and President George W. Bush to graduate Russia
from Jackson-Vanik and grant it normal trade relations. Congress felt it handy
to keep the amendment on the books: to press Russia into buying more American
poultry and meat. (The power of
U.S. “chicken lobby” must not be underestimated: 38 states, with their 76
senators, have a stake in these sales.)
Besides, lacking any real leverage in influencing Russia’s policies,
U.S. lawmakers wanted to have a stick to punish Moscow’s “misbehavior:” In
2003, Sen. Charles Grassley (R-IA) explicitly linked Jackson-Vanik to Russia’s
opposition to the Iraq war.

Experts
disagree on the extent to which the amendment affects U.S.-Russia economic and
trade relations. Some believe that
because of the annual presidential waivers, the de facto influence of the amendment is negligible and that other
factors are to be blamed for the poor state of these relations. Others argue, as does Lozansky in his
court filings, that the very need for an annual presidential review—potentially
subject to congressional interference—creates an air of uncertainty that is
damaging the long-term prospects of the bilateral economic cooperation.

Yet
everyone seems to agree that Jackson-Vanik remains a powerful irritant for the
whole body of U.S.-Russia relations, especially on the Russian side, with
Moscow loudly arguing that the annual review process is discriminatory and
humiliating. Even in the United
States, there are not many fans of Jackson-Vanik outside Congress. Some Jewish organizations, for example,
have repeatedly expressed their uneasiness with the fact that the amendment,
which they consider a landmark accomplishment in the area of human rights, is being
used to sell more American chickens.

On a
number of occasions, the Obama administration, too, promised to get rid of
Jackson-Vanik. The latest such promise
came from Vice President Joe Biden—incidentally, an active supporter of the
amendment in the past—during a spring visit to Moscow. The consensus, however, has been that the
problem lies in Congress: With the Republican majority in the House of
Representatives, there is virtually no chance that the amendment would be
repealed before Russia joins the World Trade Organization. The situation seemed completely at a
stalemate.

The
potential solution came, as they say, from a place no one expected. Addressing the World Russia Forum in
Washington, DC in April, Richard Perle—an assistant secretary of defense in the
Reagan administration and not a friend of Russia, to say the very least—dropped
a bombshell. He claimed that
Jackson-Vanik didn’t apply to Russia anymore. Perle knew what he was talking about: As the top advisor to
Sen. Jackson, Perle wrote the amendment.
Perle pointed out that contrary to popular belief, the amendment, as
originally drafted in 1974, didn’t mention Soviet Jews or the Soviet Union
itself (to say nothing about Russia).
All it said was that the normal trade relations with the United States
must be denied to non-market economies that restrict emigration. Because now Russia is market economy
and imposes no restriction on emigration the amendment is null and void as far
as Russia is concerned. In Perle’s
opinion, President Obama doesn’t even need go to Congress; all he has to do is
to issue a corresponding executive order.

The
lawsuit that Lozansky and Salvia filed less than three weeks after Perle’s
surprising revelation put this idea into legal motion.

Lozansky is
quick to add, with a smile, that this lawsuit is a “friendly” one. Its real purpose is not to “punish”
President Obama, but, rather, give him a helping hand. Obama can now use the cover of the
lawsuit to graduate Russia from Jackson-Vanik without spending his preciously
limited political capital on squabbling with Congress. And the more parties—businesses,
non-profit organizations and private individuals—that join the lawsuit, the
more likely its positive outcome.

There is
one aspect of the Lozansky-Salvia lawsuit that must not go unnoticed. It is perhaps for the first time that
two private individuals—that is, people not working for U.S. government or
belonging to established public organizations—have undertaken steps towards
bettering U.S.-Russia relations.
Should their lawsuit succeed, it may well signal that the much talked
about, yet still non-existing, pro-Russian lobby in the United States has
finally emerged.

Eugene Ivanov is a
Massachusetts-based political analyst who blogs at The Ivanov Report.